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Public Insurance and Demand for Private Healthcare

Author

Listed:
  • Titir Bhattacharya
  • Tanika Chakraborty
  • Prabal De

Abstract

Establishment of public–private partnerships is an emerging model in health care delivery. This study evaluates a pioneering social health insurance program in India that enables eligible households to access private hospitals for tertiary care services free of cost, but does not build more facilities. Leveraging policy discontinuities at state borders, we identify the program’s causal effects on utilization of private facilities and associated out-of-pocket expenditures. The results indicate a pronounced substitution effect induced by relative price changes: the program substantially increases the incidence of deliveries in private hospitals while significantly reducing out-of-pocket spending. However, we find no statistically significant effects on fertility or a key health outcome, infant mortality.

Suggested Citation

  • Titir Bhattacharya & Tanika Chakraborty & Prabal De, 2025. "Public Insurance and Demand for Private Healthcare," CESifo Working Paper Series 12370, CESifo.
    • Handle: RePEc:ces:ceswps:_12370
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    File URL: https://www.ifo.de/DocDL/cesifo1_wp12370.pdf
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    Keywords

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    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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